The federal government’s N500 billion fiscal stimulus plan will reduce increased risks for the economy raised by COVID-19 if properly implemented, financial expert says.
The experts spoke with the Nigeria News Agency (NAN) in Lagos on the N500 billion fiscal stimulus package announced by the Federal Government in response to the COVID-19 pandemic.
Uche Uwaleke, Professor of Finance and Capital Market at the Nasarawa State University Keffi, commended the federal government for introducing the N500 billion fiscal stimulus package announced by the Minister of Finance, Budget and National Planning in response to the COVID-19 pandemic.
Uwaleke said, if well implemented, the fiscal stimulus package, together with the palliatives already announced by the Central Bank of Nigeria (CBN), would subtantially mitigate heightened risk posed by the pandemic to public health and the economy.
“This package which includes about N102 billion direct intervention to State governments as well as for the improvement of health facilities nationwide, will go a long way in the provision of critical health infrastructure required to fight the disease including intensive care units, personal protective equipment, ventilators and so on.
“It is cheering news that the government has also made provision for the enhancement of hazard allowance including insurance of health workers especially those on the frontline,” he stated.
He added that the activation of the Finance Act 2020, which granted tax concessions and waivers to Small and Medium Enterprises was a welcome development.
“However, granted that the Finance Act has widened exemptions with respect to VAT, the federal government should consider postponing the implementation of the VAT increase till the crisis is over just as was done in the case of new electricity tariffs.
“The government needs every kobo it can raise in order to provide these palliatives.
“This is why the government’s effort to take advantage of a COVID-19 concessional rapid credit facility, at zero interest rate, from the International Monetary Fund should be supported as other countries like Rwanda and Mozambique have done so,” Uwaleke said.
Also speaking, Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, commended the N500 billion fiscal stimulus package, saying that it was directed largely at health sector expenditure.
Tella stated the fiscal stimulus would complement the donations made by wealthy Nigerians, corporate bodies and financial institutions to tackle the effect of the pandemic.
“One aspect I have not heard from allocations from all these sources is how much is voted for research; for a medical research institution like the one in Oshodi, Lagos, towards contributions to finding global solutions to the COVID-19. There is the need to be explicit on this.
“Also, intervention to firms producing hand gloves, facial masks and other medical attires, specifically for the pandemic have to be clearly stated so that the public can appreciate efforts at providing for and protecting medical personnel,” Tella said.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said economic crisis was at hand with the coronavirus outbreak since December 2019.
“Our delay as a nation in putting preventive measures earlier will cost us a lot to curtail the spread and manage the effects on the economy.
“The ongoing economic palliative of food sharing, transfer of money to the poor will not have impact on economic recovery or growth.
“The N500 billion intervention fund is a welcome development for managing the spread of virus and post coronavirus economic recovery if effectively utilised,” Omordion stated.
He noted that the intervention funds and palliatives should be targeted at critical sectors of the economy such as agriculture, manufacturing and healthcare, among others to ensure quick recovery. (NAN)